I am not sure if it would have mattered, but reading your post above in hindsight would it have made sense to try to get law enforcement involved from the angle of "look, he is not making the games, but taking in new money".
Would an investigator be interested in playing the role of a new customer/victim, and gathering evidence that way and comparing it to John's communications with longtime "customers"?
Not trying to armchair quarterback, but considering all the crap cops will try to set up surveillance to make an arrest on, why not this when it only takes a phone call? The $$$'s involved seem worth it.
Was this explored, and if not I am mainly posting this in case it helps in a future similar case.
Quoted from Concretehardt:
You can't make this shit up! "John.... I pissed all your money away on my own salary for 4 years of puttering around in my shop building prop games that don't work and there is no way I can build any these games, sorry making pinball is hard!"
Next day John gets an email from an unsuspecting victim...
Hey John I'm interested in AIW "John.... great I will send you an owners packet send me your money ASAP no credit card or pay pal check or cash only"
That's not a mistake its fraud & theft and John should go to jail for it, very sad to see his apologists still out there defending him... Shame on them!